Strategic shift: Swiss engineering firm ABB's digital realignment

How the engineering firm's transformation helped it surge ahead in renewables

Earlier this year, Swiss engineering technology firm ABB launched 180 digital solutions globally that would cover utilities, industries, infrastructure and transportation. ABB Ability, the new platform for the solutions, will come into play as the company looks to make 20 substations in Himachal Pradesh digital-ready after a recent order from the state utility.

The developments reflect how ABB India’s transformation of its business in recent years has helped to align itself with market drivers like renewable energy, digital service and digitalisation. This has been aided by factors such as focus on renewable; shift from old substations to digital ones, from operator-driven to smart factories and from physical maintenance to remote monitoring; and a shift from railway to electric vehicle charging solutions with cloud capability and emission controlled and automated ports.

Among the early initiatives of ABB India was stepping beyond traditional sectors to gain an early mover advantage in renewables; it opened a solar inverter factory in 2012 and is now a market leader in the segment with 40 per cent share. It also started a wind power generator factory in 2010 and now has over 4.5 Gw of installed projects. According to the company, 50 per cent of the solar energy generated in India passes through ABB equipment.

Also, at a time greenfield projects were scarce the focus was more on value additions for customers through service and optimising its installed base. “The concept of service has also undergone a sea change — earlier focus was only on addressing issues, now through remote monitoring and data analytics coupled with industry knowledge of decades we look at how to increase uptime and alert customers before downtime can occur. This has yielded rich results in double-digit growth in service,” says Sanjeev Sharma, managing director, ABB India.

Sharma points out that among other measures taken by the company in the last few years has been co-creation of products with customers and adding value to global technology made in India with local innovations, and helping customers get digital-ready (as in case of the substations in Himachal).

ABB India’s entry into the solar inverter segment marked the electrical balance of plant (eBoP) from traditional to renewable five years ago. T K Sridhar, chief financial officer, ABB India, says they witnessed demand for solar picking up a couple of years later owing to land-related and environmental issues. “One of our key strategies is an early engagement with the customer and aligning with our R&D which we carry out globally,” he adds.

He says the company can now offer much value addition to customers, and considers as a recent landmark its development of a solar plant — the largest in India — for Adani Group at Kamuthi in Tamil Nadu. It combines all the company’s offerings, starting from solar inverters to automation platform to SCADA (supervisory control and data acquisition) and renewable integration. “Customers today don’t want just a highly engineered project but they look for plug and play solutions. So, the solutions can’t be made dependent on an ABB person to guide the customer,” says Sridhar.

The renewables’ contribution to ABB India’s order book rose from two per cent in 2014 to between 12 and 15 per cent in 2015 and 2016. Its innovation in solar includes pumps drive package for farmers and floating plants.

Also, earlier the company only sold drives and motors (31 per cent of India’s electrical energy is consumed by motors). Drives control the speed of motors making them energy efficient. Now drives are digitally connected, has smartphone functions, Bluetooth connectivity and ABB India has a remote monitoring centre for drives across certain industrial sectors.

On recent market focused technologies incorporated by ABB India, Sridhar also cites the example of microgrids, which have a lot of applications in railways and transportation. The company is trying to bring a concept like microgrid for optimised use of local energy for railway stations or solar inverters for e-rickshaws. It has installed a solar microgrid in Vadodara that is expected to be up and running in a couple of months.

Its focus on digitalisation has also seen the company working industry, facilitating control of factories from iPads and mobile screens in the food and beverage, pharma or iron and steel sectors. Also, for instance, it is selling smart sensors, given the opportunities on offer with over 20 Gw of motors in India not yet energy efficient.

The services segment of ABB India has grown to contribute 12-13 per cent of the revenue stream, from eight-nine per cent before its digital transformation, points out Sridhar. The company believes opportunities are set to grow further in areas such as renewables, urbanisation and transportation even as traditional offerings of substations stagnate.

Strategic shift

• ABB India has aligned itself with market drivers like renewables, digital service and digitalisation
• It has focused on co-creation of products with customers and adding value to global technology made in India with innovation
• It is helping customers to get traditional offerings digital-ready